A Sweet Deal for Ethiopian Honey

“Before USAID, we had no confidence that there was a honey market or honey business."

Beekeeping is an ancient tradition in Ethiopia, stretching back into the country’s early history—between 3500 and 3000 B.C., according to some history books. Collecting and selling honey and other bee products produced in homes and home gardens is common throughout the country.

Despite its long history, beekeeping remains largely untapped as a formal industry in Ethiopia. More than 90 percent of Ethiopia’s honey is still produced using traditional hives. Many farmers lack modern technologies, operate on a small scale, and are unaware of the quality of their product and potential markets outside of their immediate communities. As a result, most of the honey is traded informally or used to produce tej, a popular Ethiopian honey wine.

Ethiopia’s largest cooperative union for producers of honey and other bee products, Zenbaba Bee Product Development and Marketing, receives honey from 4,100 member households. Zenbaba was formed to address challenges for its members such as lack of an export market, limited access to credit, and outdated technology.

Since 2011, USAID has provided expertise and general support to the honey sector and to Zenbaba, specifically, to encourage beekeepers to adopt new technologies and practices to improve their productivity and honey quality.

According to the International Chamber of Commerce, Ethiopia is Africa’s largest producer of honey (23.6 percent of the continent’s total) and the fourth largest producer of beeswax worldwide. And although honey production is estimated at 50,000 metric tons per annum, it represents only 11 percent of the country’s production potential.

Headquartered in Argentina, Parodi Apicultura is a world leader in honey production, with operations in Brazil, Chile, Uruguay and the United States. To expand its global offerings, Parodi looked to tap into Ethiopia’s potential. To stimulate private sector investment for the honey sector, USAID played a major role in facilitating a deal between Parodi and Zenbaba.

Looking toward an upcoming food expo, USAID training insured that Zenbaba was fully prepared for discussions with commercial honey buyers. Zenbaba concentrated on improving the beekeeping, grading and packing materials of its primary cooperatives as well as improving the storage facilities of the union itself to expand its agribusiness activities.

After examining Zenbaba’s facility, Parodi decided to invest, and the two organizations inked an agreement in July 2013. Through this private partnership agreement, Parodi agreed to: purchase 500 metric tons of honey and other bee products for export, increasing to 1,000 metric tons in the second year; facilitate a grant through the Parodi Foundation for 50 percent of the cost of modern processing equipment to increase Zenbaba’s capacity to export; and provide technical support in the form of modern beehives and training in how to use them.

Zenbaba and Parodi also agreed to establish a new private honey processing company in Ethiopia as a joint venture. USAID will assist Zenbaba to develop a business plan; modify existing facilities to fit the new equipment; train staff and member co-ops; and provide technical assistance on food processing and safety as well as achieving organic, fair trade and quality assurance certifications.

“Before USAID, we had no confidence that there was a honey market or honey business. Because of the market linkages created by the USAID project, we are now encouraged to increase the productivity per hive and the number of hives per household,” said Adimtew Tesfaye, chairman of one of Zenbaba’s eight primary cooperatives. “As a result, the motivation of member farmers has generated interest by new farmers in starting beekeeping activities.”

The Parodi-Zenbaba deal has tremendous potential for the Ethiopian honey industry. Zenbaba will implement state-of-the-art production technology in a honey processing plant—the first of its kind in Africa. The new technology could potentially triple Ethiopia’s export market within the next three years.

Through additional private investment, Ethiopia stands to increase its global market share of honey even further. With its diverse plant species feeding the bees, nectar rich forests and large potential areas for beekeeping development, Ethiopia is on its way to becoming a major player in honey and bee product exports to the rest of the world.

USAID's assistance is part of its Agribusiness Market Development project under the U.S. Government's Feed the Future strategy for Ethiopia. Implemented by ACDI/VOCA, the five-year project, which began in May 2011, increases the competitiveness of agricultural products—such as wheat, maize, sesame, chickpeas, coffee and honey—that support the Ethiopian Government's Agricultural Growth Program (AGP). The project, which is USAID’s largest contribution to the AGP, also enhances access to finance and stimulates innovation and private sector investment, focusing on market opportunities in each chain.